Ltc shop growth In 2026 Reflecting ‘dramatic Shift’ From Two Years Ago 

Leaders with LTC Properties (NYSE: LTC) are continuing the company’s pivot to senior living with a strategy of acquiring communities and adding them to its senior housing operating portfolio.

The Westlake Village, California-based real estate investment trust (REIT) expects its senior housing operating portfolio (SHOP) to account for 40% of pro forma annualized net operating income (NOI) by the end of September, a quarter ahead of previous guidance, and 50% by the end of this year.

Overall, the company’s goal is to get 75% of its annualized NOI from its SHOP segment by the end of 2028, but achieving that target is dependent on maintaining its current investment pace, executives said during Thursday’s earnings call.

This is an acceleration from the strategy LTC outlined earlier this year, when the company said it was “all in” on SHOP growth and cutting skilled nursing exposure.

“I see it as a pretty dramatic shift from what it was in 2024,” said LTC Co-CEO Pam Kessler on Thursday’s earnings call.

LTC increased its 2026 SHOP acquisition midpoint forecast to $900 million, a 50% increase from the first quarter of 2026. The company expects to close on approximately $700 million in acquisitions by the end of the third quarter. Through July, LTC closed on $400 million in SHOP acquisitions with an expectation for another $300 million by the end of September and $200 million before the end of 2026.

The company expects $730 million of 2026 disposition proceeds and loan payoffs, and roughly two-thirds of the sales involve skilled nursing properties, bringing the total skilled nursing disposition proceeds to $570 million, while also selling a projected $160 million of triple-net lease senior living assets. Proceeds will be redeployed into SHOP investments as operators continue to improve performance, leaders said on Thursday.

“We will have outperformed our underwriting on those new deals,” Kessler said of LTC’s SHOP growth expectations. “We will have significantly transformed the intrinsic growth profile of our portfolio.”

LTC is aiming for newer, larger and stabilized senior living properties to bring under its SHOP platform. Of the $700 million in expected SHOP acquisitions, the properties have an average age of nine years and over 75% are located in National Investment Center for Seniors Housing and Care (NIC) primary markets. The communities also average roughly 110 units and over half are full-continuum independent living, assisted living and memory care communities.

LTC believes the combination of stabilized occupancy, well-located communities and limited new supply creates room for operators to lift rates.

Most of the transactions “have been or will be” with LTC’s existing senior living operating partners, according to Executive Vice President of Asset Management Gibson Satterwhite.

“They’re able to control their assets, and we’re able to realize really good attractive value for our shareholders and redeploy into higher-growth assets,” Satterwhite said.

In the second quarter, LTC SHOP NOI was $13.3 million, compared to $12.9 million from the first quarter. Year-to-date occupancy was 89.7%, equal to the 2025 level, although the company said occupancy was about 145 basis points higher year over year and approximately 90 basis points below LTC’s expectations.

To date, the company’s 27-property core SHOP portfolio has a high concentration of standalone memory care, approximately 32% of all units. Overall, the company’s SHOP segment includes 34 communities. Overall, LTC owns 185 properties across senior living and skilled nursing properties.

Kessler said next year’s funding mix should return to a more typical balance of roughly 70% equity and 30% debt. This year, she said, is different because of the scale of asset recycling.

“We’re turning over a third of our portfolio in less than 18 months,” Kessler said. “That’s taking a lot of work here.”

On limited near-term funds from operations (FFO) growth, Kessler noted it was the result of transitioning from triple-net and lending investments to a portfolio that is more positioned for SHOP growth. So far in 2026, LTC has converted $59 million in SHOP conversions, while adding two new SHOP operators, according to the company’s second quarter supplemental.

“This has been a heavy lift transformation year,” Kessler said.

LTC stock rose 1.68% on Thursday, up $.065 from the previous day’s trading to rest at $39.45 per share.

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